By Jessica Dye
NEW YORK (Reuters) - Boston Scientific Corp’s back-to-back losses in the first two federal trials over its transvaginal mesh devices could drive up the cost of resolving thousands of similar lawsuits, according to legal experts.
On Thursday, a jury in West Virginia awarded four women $18.5 million for injuries they said were caused by the Massachusetts-based company’s Obtryx device for stress urinary incontinence, including $4 million for “gross negligence.”
The verdict came one week after a Miami jury awarded $26.7 million to four women implanted with the company's Pinnacle device for pelvic organ prolapse.
Particularly troubling for Boston Scientific – which faces more than 24,000 mesh claims in U.S. state and federal courts – were the large compensatory damages, experts said. Compensatory damages are generally a more reliable indication of how much similar claims are worth, and more difficult to reduce on appeal, than more subjective punitive awards, experts said.
In the Miami trial, each woman received between $6.5 million and $6.7 million, while in West Virginia compensatory damages ranged from $3.25 million to $4.25 million.
“This has to hurt,” said Howard Erichson, a Fordham Law School professor. After the verdicts, “the company has to be drawn to finding a way to settle the bulk of the remaining cases,” he said.
Unlike punitive damages, which punish wrongdoing, compensatory damages are tied to each plaintiff’s actual injuries - for instance, medical treatment or lost wages.
While compensatory damages vary with each case, the fact that multiple juries have valued mesh claims at millions of dollars apiece is significant, experts said.
The outcome of “bellwether,” or test, trials is not necessarily an indication that every woman will win her lawsuit.
But early verdicts show both sides how juries value the cases - the data is critical in determining how much each claim could be worth in settlement. U.S. District Judge Joseph Goodwin in the Southern District of West Virginia, who oversees federal mesh cases, is trying to speed up that process by trying cases with multiple plaintiffs and ordering hundreds of suits to be prepared for trial as early as next year.
Big verdicts put pressure on the company to increase settlement offers to keep cases from going before a jury, experts said. They "absolutely send the message" to companies to consider settling, said Erin Copeland, a lead trial lawyer for the Miami women.
Boston Scientific and fellow mesh defendants C.R. Bard and Johnson & Johnson’s Ethicon Inc – which are among seven companies hit with about 67,000 federal cases - have faced a handful of trials so far, winning some and losing others.
Boston Scientific previously said it will challenge the verdicts, and declined further comment on Friday. The company has $945 million in its litigation reserves, for settlement and defense costs, according to a recent U.S. Securities and Exchange Commission filing.
There’s no magic number for how many verdicts it takes to reach a settlement. Endo International’s American Medical Systems announced recently it had set aside $1.6 billion to settle transvaginal mesh cases without any trials, whereas Merck tried nearly 20 cases over injuries linked to the painkiller Vioxx before reaching a $4.85 billion settlement.
And, experts say, the endgame for large-scale mass litigation is almost always settlement.
“Some sort of collective settlement is going to make sense for the plaintiffs, it’s going to make sense for the defendant, and it’s absolutely what the judge wants,” Erichson said.
(Reporting by Jessica Dye; Editing by Alexia Garamfalvi and Douglas Royalty)